Nicola Sturgeon admits in new book she got it wrong on oil and gas - as Aberdeen paid the price

Press and Journal

2 days ago

Nicola Sturgeon has admitted the SNP over-inflated promises about oil and gas in the independence campaign, just before a collapse hit Aberdeen and the north-east hard.
The former first minister looks back at policies and pledges central to the regional economy in an extract from her new memoirs, called Frankly.
The much anticipated book relives the events running up to the crucial vote on Scotland's future in September 2014.
In it, she reflects:
The publication of the book comes just as government figures were forced again to respond to falling North Sea revenue and a widening financial deficit.
In her book, Ms Sturgeon looks back more than 10 years when prices were riding high.
'The numbers we had used in the referendum White Paper to illustrate an independent Scotland's fiscal position had been heavily dependent on oil revenues,' she writes.
'And, of course, we had based these on the optimistic estimates that Alex had insisted on.
'I didn't know then that a total collapse in the oil price was just around the corner.
'In early 2015, this caused significant political and practical problems. The practical came from the impact on the economy of Aberdeen and the north-east, which is heavily reliant on the oil and gas supply chain.
'As the major companies started to shed jobs and curtail activity, the effects were quickly felt across the region.'
As first minister, Ms Sturgeon set up a taskforce but powers were limited and political opponents sensed opportunity.
'To have the price of a barrel of crude fall to around 40 US dollars when we had relied on a figure of well over 100 US dollars in the referendum blew a massive hole in the credibility of our argument,' she added.
'I resolved then that in any future referendum, we must not allow the strength of the independence prospectus to stand or fall on the volatile value of oil, especially as it is a finite commodity.
'We needed to show how Scotland's economy would be sustainable in the long term without it.'
On Wednesday morning, the volatility of North Sea revenue and government policies were again under scrutiny with the publication of annual revenue and spending.
It coincides with another push for independence under First Minister John Swinney.
The difference between revenue and public sector spending, including capital investment, was a deficit of 11.7% of gross domestic product in Scotland.
When excluding the North Sea, there was a deficit of 14.4% of GDP – equal to £30.6 billion.
The Scottish Government has faced criticism for delays to an energy strategy and lack of vocal support for oil and gas.
Much of the crucial policy power rests at Westminster where the Labour government is under pressure to address a windfall tax on profits.
Russell Borthwick, chief executive at Aberdeen and Grampian Chamber of Commerce, said: 'If the UK Government continues to tax the industry at 78%, then we face an accelerated industrial decline, we will lose our world class supply chain to other parts of the word, and our oil and gas imports will continue to soar, syphoning tens of billions of pounds out of the UK economy.
'However, there is another future, one where we commit to sourcing the oil and gas we require as a nation from the North Sea, supporting jobs, public services and – crucially – creating the bridge required to a just transition while we build out renewable energy projects.'
Responding to the new figures, Scottish Government Finance Secretary Shona Robison said: 'Falling oil prices and a decrease in extraction present challenges going forward, but we are clear in our support for a just transition for Scotland's valued oil and gas sector, which recognises the maturity of the North Sea basin and is in line with our climate change commitments and energy security.'